Broadband take-up surged last year

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The take up of broadband services by Australians surged in the
past twelve months driven by widespread price cuts, the consumer
watchdog said today.

The Australian Competition and Consumer Commission (ACCC) said
that at the end of 2004, there were 1.55 million broadband services
connected across the country.

This represents an increase of 121.6 per cent on the December
2003 figure of 698,700 services connected.

"The past 12 months have seen an unprecedented surge in the
number of people signing up to broadband services in Australia,"
ACCC chairman Graeme Samuel told a telecoms conference in
Sydney.

He said ADSL, which offers high speed internet access through
fixed telephone lines, has emerged as the dominant broadband
service.

The take-up of ADSL services now stands at 1.05 million.

"This rapid increase in broadband customers was clearly driven
by the big and widespread price cuts that occurred across the
sector last year," Samuel said.

It also coincided with an ACCC competition notice issued to
Telstra in relation to the pricing of its wholesale and retail
broadband services.

As a result, Telstra announced significant price reductions for
its retail broadband services and later cut prices for its
wholesale services.

"Whilst the extent of these wholesale price reductions would
have varied between carriers, it generally cut wholesale rates by
about a third," Samuel said.

The resolution of the issue also involved an agreement by
Telstra to rebate $6.5 million to its wholesale customers.

"Importantly, the growth in DSL markets since the competition
notice was issued has been shared by both Telstra and its wholesale
competitors," Mr Samuel said.

He added that the ACCC's latest snapshot report on the broadband
market showed there had been no "significant" long-term increase in
Telstra's retail market share, indicating that Telstra did not
benefit directly from its conduct.

ACCC's broadband market report is based on data provided by the
major carriers and includes cable, satellite, ADSL, DSL and other
services.